Why the Playstation Portable failed
PS Vita

Written by Bartek Bezemer

I want to help you get more out of your online marketing by giving you insider tips and combine them with market trends to help you better reach your target audience.

April 2, 2022

The Playstation Portable showed console gaming on the go could be done, but its many shortcomings became its downfall.

In December 2004, Sony launched the Playstation Portable (PSP), proving that you would be able to have a Playstation in your pocket. At launch the device was an instant hit, but sales quickly started to slow down and problems ensued for its custom made UMD drive. 

The PSP’s short lived hype and Nintendo’s dominance

The PSP launched in Japan in 2004 for a retail price of 19,800 yen, slightly below $200. The PSP was Sony’s answer to the handheld gamer who wanted to play on the go with no graphical compromises. The handheld would be accompanied by 21 games with 100 being said to be in development. During its launch year the handheld console reached 470,000 units sold, a year later sales skyrocketed to 9.61 million. The device was a hit with its high resolution screen and premium design. Sony was able to gain some momentum, but it got stiff competition from Nintendo who was outrunning the PSP with 5.26 million units sold in 2005 and nearly doubling its sales the year after with 11.46 million units sold worldwide. 

Nintendo was able to get a headstart as the DS had a retail price of $149 and would launch in North America in 2004,  whereas the PSP only launched in Japan and would come to North America in 2005. Sony claimed that it wanted to expand the software library to have a better offering, although news surfaced that Sony Computer Entertainment had trouble distributing dev kits to developers according to analyst P.J. McNealy. 

Refreshed Playstation Portable couldn’t outrun Nintendo’s DS

In July 2007, Sony announced the updated version of the PSP, which was 19 percent slimmer and 33 percent lighter according to the hardware manufacturer. Just two weeks into its release the new PSP surpassed 500,000 unit sales in Japan. Despite the initial success, EA stopped the online support for FIFA 06, Fight Night, Madden NFL and NBA Live 06. With the discontinuation of the online support, one of the major selling points of the PSP was lost and the popular games lost core components. 

Sales for the PSP peaked in 2008, reaching 14.05 million units sold. Sales quickly started dropping, falling to 9,92 million in 2009 and down to 7.52 million in 2010. The Nintendo DS on the other hand, had been sold 30.31 million times in 2008, peaking in 2009 with 31.18 million units and dropping 27.11 million in 2010. Marking a key turning point for the Playstation Portable.

In 2011 the Playstation Portable had shipped over 71 million units. To mark this milestone Sony launched a new version with a low price point of just $99. In April of the same year, Sony announced the PSP Go would go out of production, with Sony saying it was shifting its focus to the next generation portable gaming device, which would become the Playstation Vita retailing for $249. The timing was unfortunate for Sony as it was still recovering from the PR nightmare which was the Playstation Network hack, which resulted in 2.2 million customer credit card numbers being compromised and 77 million users reporting fraudulent activity on their credit cards. Amidst the hack, Sony shut down the network for over a week during the month of April. 

Seven years after the launch of the PS Vita, senior vice president for Sony Interactive Entertainment Hiroyuki Oda announced that the company would stop manufacturing and shipping of the handheld console in Japan in 2019. Tech Times noted that there was little interest in the PS Vita as smartphone gaming was rising in popularity and the Nintendo Switch enjoyed massive success. 

The Playstation Portable Marketing push

In 2006, Engadget spoke to Peter Dille, Sony Computer Entertainment America’s Senior Vice President of Marketing about how the Nintendo DS was outselling the PSP and how Sony was planning to persuade consumers to opt for Sony’s handheld. Dille said that the company wasn’t competing with the DS, explaining that the target audience was different. The DS was geared towards children, while the PSP was aimed at men between the ages of 18 and 34. It claimed that it was doing the ‘heavy lifting’ as its target audience had abandoned portable gaming when entering adulthood and Sony needed to create a new marketplace for itself. Despite the bold statement, Sony knew it had to adjust its targeting.  

In February 2009, Sony went for a multi million advertising campaign in the UK. The over $5 million campaign in collaboration with TBWA/London, would promote games for the Playstation 3 and the Playstation Portable. A little over half of the budget would be dedicated to promoting the new Killzone 2 game which would be shown at TVM cinema, online and in-store locations. In May 2010 a dedicated social campaign was launched for the PSP, targeted at 8 to 15 year olds, a clear shift from the older age groups it was trying to target years prior. 

Sony was going for a big marketing push with its well known marketing character Kevin Butler, which was portrayed by Jerry Lambert. In 2010, Sony announced the Step Your Game Up campaign featuring Butler’s apprentice, Marcus Rivers, portrayed by  Bobb’e J. Thompson. Through the Step Your Game Up campaign Sony wants to dive into the portable gaming experience. But all the marketing money in the world couldn’t overcome the PSP’s biggest drawbacks, the UMD. 

The UMD became the downfall of the PSP

To make the games work on the PSP, Sony created a new disc format called the Universal Media Drive, or UMD for short. But creating a new media format comes with its own set of challenges. Shortly after its launch, Sony sent out dubious messaging concerning the UMD. Already in July 2007, the company claimed it  was committed to the UMD, saying it would never abandon the optical disc. John Koller, senior marketing manager at Sony, said to Pocket Gamer that the product had many strengths, like the size, the form factor and its easy manufacturing process, making it a worthy competitor to the Nintendo DS cartridge. 

Although the format was not without its shortcomings. Koji Igarashi, developer of Castlevania said that the Castlevania: The Dracula X Chronicles adaption suffered from long loading times, one of the major drawbacks of the UMD drive. Koller countered the argument by stating that the programmers at Sony had done a great job optimizing loading speeds and just porting the game from a DVD to UMD, won’t work due to size limitations. Sony had also placed its bets on movies on the go, but the technology was already falling short as digital movie distribution took flight, although Koller claimed that consumer demand was there, as it saw a 35% year over year growth from 2005 to 2006.    

Sony had also placed its bets on movies on the go, but the technology was already falling short as digital movie distribution took flight

In 2009, two years after Koller was back to defend the medium again as Sony still believed in the power of the disc, saying that a group of consumers is still committed to physical discs. The statement is contradictory to John Koller’s statements made in an interview with Wired, where he noted that digital distribution fitted in the direction the world was heading. Sony was also in an uphill battle with piracy which hurt the support for the platform, with third-party developers such as EA, Activision and Ubisoft considering backing out altogether. 

Fearing that developers would actually back-out due to piracy combined with the struggle to develop games due to the limited capabilities of the UMD, the company came with the PSP Go. The PSP Go would replace the UMD Drive with a 16 GB flash memory card and retail for $250. The price raised eyebrows at tech enthusiasts. Arstechnica noted that for $50 less, one could buy a PS3, which had the added bonus of having a blu-ray drive. Or go for the PSP 3000, which was also fifty dollars cheaper and came with a 4GB Pro Duo card. Combined with the device launching just when the great recession hit, a $250 price point might be too much for the average consumer. 

In May 2009 Sony told gamers they would be able to convert their games to a digital format so they would be playable on the PSP GO which support the UMD Drive, but retracted the option. This was a major blow to fans of the platform and also a setback for the launch of the new PSP. In combination with the high retail price, this would be a double blow. In 2010, CEO of Sony Computer Entertainment Kaz Hirai spoke on the developments at Sony and noted that the price point of the PSP Go could be an issue. In an attempt to recover sales of PSP Go, it decreased the retail price to $200.

The lack of a conversion option is curious, when you take into account that Naoya Matsui, Head of Sony Computer Entertainment’s product planning division, already told in an interview to GameBusiness.jp back in 2009 that the company considered a disc-less version of the PSP from the start. Matsui said that at the time, the digital infrastructure wasn’t mature enough and it was synchronising PSN and the PS3 to make media transfer possible. 

The PSP looked good on paper 

The PSP was a daring bet from Sony, which at the time was an amazing feat in engineering. The graphics rivaled consoles and its design was slique and modern. But it also was its Achilles heel. While the price point wasn’t light years above the Nintendo DS at time of launch, Sony aimed at an older audience, which are harder to convince to pick up a handheld console compared to children, who like to play with their favorite Nintendo character wherever they go. Sony would later readjust the positioning of the PSP to younger audiences, but with parents pulling their wallets, they might go for a more robust, cheaper alternative, which was the DS. The later than planned launch in North America also didn’t do the company any favors, giving its biggest competitor the opportunity to capture the market without much resistance. 

The UMD drive was also a nightmare for developers and Sony had overestimated the potential of the device in an era when the smartphone was picking up speed and becoming a more suitable gaming platform. Sony truly believed in gaming with its faith in the PSP, but a chain of bad decisions, couldn’t make up for all its shortcomings.

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